FSA bans Powell Price & Company director for failing to pass on client premiums to insurers

The FSA has banned Nigel Layton a director of Powell Price & Company from carrying out any functions in relation to any regulated activities after finding him not fit and proper to work in the regulated financial services industry.

The regulator found that Powell Price had failed to pass on client premiums to insurers, leaving clients uninsured, and used the money to run the day to day activities of its business.

Powell Price is a small independent financial adviser based in Leominster, Herefordshire, although it primarily conducted insurance business.

Jonathan Phelan, Head of Retail Enforcement at the FSA, said: "Firms must not use their clients' money for their own purposes. The FSA will deal robustly with firms and individuals that misuse client money.

“Deliberate and knowing rule breaches of the kind committed by Mr Layton can lead to the individual being banned from the regulated financial services industry which is the most serious sanction we can impose. By his misconduct Mr Layton posed a risk to consumers, and to confidence in the financial system."

Key reasons for the FSA's action against Layton included the fact that he:

• knowingly and deliberately accepted clients' insurance premiums which he failed to pass over to the relevant insurers and intermediaries, leaving at least 16 clients uninsured;

• used client money to cover Powell Price's running costs and other business expenses, over a period of at least 12 months from December 2005, when he knew that the financial position of Powell Price was deteriorating;

• stopped managing Powell Price’s client account (the Client Account) and he failed to carry out any reconciliations of the Client Account; and

• has accepted that he was solely responsible for this misconduct.